The overall goal of the proposed program is to develop an effective oxygen carrying red blood cell (RBC) substitute based on hemoglobin encapsulated within a new type of "STEALTH" liposome that evades immune system recognition and thus is expected to be substantially less immunotoxic than conventional liposomes. Although hemoglobin encapsulated in conventional liposomes has been shown to provide an effective means of oxygen delivery in experimental animals, our preliminary experiments suggest that such systems may seriously impair host defense by saturating the capacity of the mononuclear phagocyte system (also referred to as the reticuloendothelial system or RES) to clear pathogens from the bloodstream. "Stealth" liposomes (i.e., liposomes containing polyethylene glycol lipid derivatives) are designed specifically to be less susceptible to phagocytosis by the RES. Moreover, our preliminary results suggest that such Stealth liposomes are less immunotoxic than are liposomes made with conventional lipids. In the present program via a select group of studies, the efficacy, pharmacokinetics, systemic toxicity, cytotoxic effects and impairment/blockade of the RES of hemoglobin encapsulated in Stealth liposomes will be investigated. The long-term objective of the program is to develop Stealth liposome formulations which will meet established clinical criteria for satisfactory performance as a red cell substitute, will have acceptable toxicity, and which will have the potential for scale up to high volume production with adequate storage stability (wet or dry).